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2016 (3) TMI 537 - ITAT MUMBAIPenalty u/s 271(1)(c) - non communication of charge - Held that:- On perusal of the said notice we have observed that the said notice did not contain any specific charge as to whether the penalty proceeding was initiated for concealment of particulars of income or for furnishing of such income and even in the body of the assessment order, what has been stated is, “penalty proceedings u/s 271(1)(c) r.w. Explanation thereto are initiated separately”. In these situation it is clear that by not specifying the specific charge in the show cause notice, the assessee has infact been denied is reasonable and sufficient opportunity of being heard as the assessee was not even knowing what was the fault for which it was to explain innocence. It is settled law that when a particular penal provision like clause-C of sub-section1 of section 271 of I.T. Act, 1961, deals with more than one situation for attracting penalty provisions, the AO is duty bound to communicate the charge “Specifically” so that assessee can explain his reasons and superior authority can test the application of mind. In this regard we found support from the judgment rendered by Hon’ble Bombay High Court in case of CIT vs. Kaushalaya [ 1995 (1) TMI 25 - BOMBAY High Court ]. - Decided in favour of assessee Disallowance made consequent to change of heads of income - Held that:- While passing of the penalty order there is no recording of the fact that the Explanation offered by assessee was found false and unless falsity of the Explanation is established, no penalty can be imposed. We are of the considered view that the penalty under the aforementioned grounds has been levied merely on the basis of additions by disallowing certain claim/expenses and there is no material or evidence has been brought on record to show constructive concealment on the part of assessee. We found our support from the decision rendered in the case of CIT vs. Reliance Petroproducts Ltd. [2010 (3) TMI 80 - SUPREME COURT ] wherein it has been categorically mentioned that in order to expose the assessee to the penalty, the case should be strictly covered by the provisions and the penalty provisions cannot be invoked in the routine manner. A mere making of a claim which is not sustainable in law by itself will not amount to furnish inaccurate particulars regarding the income of the assessee and as such claim made in the return cannot amount to the inaccurate particulars, therefore, considering the entire case as well as factual position, we allow the abovesaid grounds.- Decided in favour of assessee
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